Why retirement isn’t working

Tony Sutcliffe was made redundant from his job as an IT manager at the age of 60. For three years he failed to get a job, even going so far as to dye his grey hair. A subsequent interview went well. The manager took his passport off to photocopy it. “When he got back, he queried if he was reading it correctly; was that the year of my birth? Once I confirmed that it was, he couldn’t get me out of the place fast enough.”

It isn’t just that some jobs become too physically demanding to do as you get older, even for those who are relatively fit. It’s also that people looking for a job in their 50s and 60s – and not many have a secure job for life in the same company these days – find it harder to get hired, no matter how impressive their CV. As anyone who has been rejected almost immediately after applying knows, firms are increasingly using AI to screen CVs. But in the UK they are under no obligation to disclose how or even whether they use it, and if they are rejecting applicants based on age-related criteria. When the NHS studied AI CV screening, they found it could reproduce social biases.

In theory, ageism in recruitment is illegal under the Equality Act, unless an employer can show the decision to hire someone younger is “objectively justified and proportionate”. In practice, it is rife.

“Ageism is just as prevalent as it’s ever been,” says Elaine Smith of the Centre for Ageing Better. “Often employers don’t realise they’re doing it.” But this means that raising the retirement age is not as simple as it looks. Is it fair to expect people to find a job in a market biased against them? Will it even end up backfiring, as more people in late middle age are pulled into poverty or claim disability benefits they might otherwise not have had to resort to?

All this comes at a time when the workforce is about to be radically reshaped by AI, even if we do not yet know exactly how. Predicting what jobs will be available in a decade’s time is a fool’s errand. We do know that one of the ways people try to bridge a gap between full-time work and complete retirement is through part-time work. Yet the recent hike in National Insurance contributions for employers has also made it much more expensive to hire someone part time.

Smith says hiring managers are often reluctant to hire older people because they think they will be looking to retire soon, whereas in fact they are ready to work for longer than ever – and will often consider lower wages despite their experience. Others assume they may not have the right skills or will be less confident about using technology, even though the days when people in their 50s were unable to use a smartphone are long gone. It is possible to have too much experience, because employers can prefer someone malleable whom they can “train in” to a role. “Sometimes,” she says, “there’s that belief that you don’t need help getting a job when you’re older”. The reality can be quite the opposite.

Given how willingly we now lay down divisions between the generations – pitting boomers against millennials and ascribing character traits to entire cohorts – ageism may have taken on new forms. Does someone who has paid off their mortgage deserve a job as much as a new parent priced out of home ownership? Will a “Karen” understand how 20-somethings approach their work? 

Yet older workers bring some advantages. Research among employers found they are seen as more reliable, more loyal and as having a stronger work ethic. Oddly, the boom in working from home does not seem to have made them more employable. It ought to have been a good thing for older workers who already have professional networks and find long commutes exhausting, but there is no evidence to suggest that it has helped them hold on to work. After the pandemic, “we haven’t seen the same bounceback in labour force participation in older people as we have with younger ones,” Smith says.

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For some who can’t find jobs, the only answer is to draw down pension savings early – if they have them: a quarter of Britons don’t. Stuart Craker was a shipping manager until his early 50s. After 18 months of looking for a job and running down his savings, he passed the fitness test to become a postman. He spent four years on delivery rounds. “I picked up various injuries and the wear and tear on my body was obvious by trips to the physio and podiatrists… I would spend my weekends trying to repair muscles and ligaments so I could walk on the Monday.” By the time he was 60, he knew he had to quit. That, incidentally, is the median age at which over-40s still in work would like to retire.

Looking for management jobs in shipping had proved fruitless. “It seemed to me you have to keep climbing the pyramid, and if you fall off and can’t jump back quickly you are consigned to the rubble around its base.”

Most people can start to draw a private pension from 55 (though this will soon rise to 57), perhaps earlier if they had to retire early due to ill health. Any lower than that, warns Laurence O’Brien, a senior research economist at the Institute for Fiscal Studies, and it could be hard to maintain a good standard of living during retirement. “I’m not sure we should be encouraging that more than we do: some people aren’t using it for paying the bills, but for holidays.”

In theory, the government could make it more attractive for firms to hire older workers through tax breaks. But O’Brien warns there would be pushback, especially among younger workers trying to get a job. What might work better, he suggests, is making the benefits system a little more generous for people in their mid-60s who find themselves in poverty. Yet when Labour is pressing ahead with benefit cuts, that looks highly unlikely.

Smith urges people not to abandon hope, particularly given the job market is difficult for everyone right now. Many will not want to try the Jobcentre, and sometimes with good reason. (“I eventually decided to give it a miss when they suggested I should go on a computing course and learn how to use a PC,” says Sutcliffe. He has an MSc in computing.) But there are other organisations that specifically help older jobseekers. “Know how to pull out your key achievements, look at any training you can access and be open to different things. You can also access apprenticeships if you can afford to earn slightly less.” In some professions, it may be possible to start up on your own.

Sutcliffe ended up in a completely different job, earning minimum wage. At the beginning of the pandemic, a friend asked him if he had considered working in care, and he took on two days a week at a residence for vulnerable adults. “I enjoyed it tremendously. Much of the work is trying to keep the individuals safe, making sure their environment is clean, and cooking their meals. I found myself encouraging others to experiment to try and give the residents better quality meals. I also regularly took some of them out for day trips, and ensured they stayed within Covid distance rules.

“Although I was not identified as one of the ‘senior staff’, I had others regularly approach me for advice and assistance.” He has now stopped work altogether but stood for parliament in the general election last year.

In the end, the government cannot force firms to take on older workers. As Dumbledore put it, youth cannot know how age thinks and feels. Still, now we have decided that people need to work for longer, Gen X will be the first generation to ask: “Sure. How?”